SMBC Exits Kotak as Yes Bank Investment Nears
Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has decided to exit Kotak Mahindra Bank by selling its entire 1.65% stake through a block deal valued at around ₹6,166 crore. The shares will be sold at a floor price of ₹1,880 each, marking SMBC’s complete divestment from Kotak after several years as a minority investor.
Exit Supports Yes Bank Stake Purchase
The sale comes as part of SMBC’s strategy to fund its planned investment in Yes Bank. India’s competition regulator and the Reserve Bank of India have already approved the Japanese banking group to acquire up to 24.99% in Yes Bank without being classified as a promoter. This clearance allows SMBC to significantly strengthen its presence in India’s banking sector. The proceeds from the Kotak transaction will be directly channelled into the Yes Bank stake purchase, making it one of the largest recent foreign investments in the Indian financial sector.
Market and Investor Reaction
Shares of Kotak Mahindra Bank reacted with limited volatility, recording a mild gain of about 1% in early trading. Analysts noted that the block deal was largely anticipated, and investors focused more on the implications of SMBC’s Yes Bank entry rather than its Kotak exit. Market experts believe that the move could support Yes Bank’s capital base and lending capacity, while Kotak is expected to remain unaffected given its strong fundamentals and diversified shareholder base.
